Recently, the prices of battery materials have gradually stabilized, and the prices of battery grade lithium carbonate, lithium hexafluorophosphate, and other materials have significantly rebounded.

　　The price of battery grade lithium carbonate has returned to 300000 yuan/ton

　　Market price trend of battery grade lithium carbonate products from January 1, 2018 to May 15, 2023 (data source: Wind)

　　Since the end of April this year, the price of battery grade lithium carbonate has continued to rise from the bottom area of 180000 yuan/ton, and has now returned to 300000 yuan/ton.

　　According to data released by Shanghai Steel Union, on May 18th, the price of battery grade lithium carbonate increased by 15000 yuan/ton, with an average price of 300000 yuan/ton; According to SMM data, on May 18th, the average price of battery grade lithium carbonate was 290000 yuan/ton, an increase of 16000 yuan/ton compared to the 17th, and the highest quotation also reached 300000 yuan/ton; According to data from Business Society, the average domestic mixed price of battery grade lithium carbonate on May 18th was 300000 yuan/ton, an increase of 25.52% compared to the average price of 239000 yuan/ton on May 14th.

　　Business analysis shows that by observing market changes, lithium carbonate prices have continued to rise strongly this week. In terms of supply, the pricing power of upstream raw material lithium mica is biased towards mines, and the hoarding sentiment among traders remains fierce. The price of spodumene has also increased significantly recently, with some lithium salt companies reducing their production schedules in May due to a lack of ore. Due to the stability of overseas supply, the production plans of the top lithium salt companies have not undergone significant changes in the short term.

　　In terms of demand, downstream positive electrode material factories still mainly focus on replenishing their stocks on demand, but the number of days in reserve has increased compared to the previous period. But with the recent events such as salt lake auctions and mica auctions, expectations for the lithium carbonate market have increased. In addition, the strong sentiment among traders and the reluctance of lithium salt factories to sell have led to a slight panic in the market.

　　It is reported that on the afternoon of May 11th, Qinghai Salt Lake Lanke Lithium Industry Co., Ltd. held a total of 600 tons of industrial grade lithium carbonate auction, with a transaction price range of 241-251000 yuan/ton. According to data from various quotation platforms, the price of industrial grade lithium carbonate on that day was basically around 210000 yuan/ton.

　　Lithium carbonate analysts from the business community believe that the current sharp rise in the price of lithium carbonate shows an irrational state and is heavily guided by market sentiment. Although the spot inquiry has increased, it is still dominated by rigid demand. It is expected that the price of lithium carbonate will maintain a strong operation in the short term.

　　SMM also mentioned that lithium carbonate prices continued their irrational upward trend this week. Due to the high price sentiment in the salt market, it is difficult to find low-priced spot goods, while downstream material factories mainly restock on demand, resulting in a significant shift in lithium salt inventory. In addition, due to market hype, salt factories are overcrowded and unable to produce goods, resulting in chaotic market operations. As short-term price rises are mostly guided by sentiment, the spot price may return to the fundamental operation after the market sentiment calms down.

　　Lithium hexafluorophosphate prices have doubled within the month

　　Market price trend of lithium hexafluorophosphate products from January 1, 2018 to May 15, 2023 (data source: Wind)

　　Market price trend of lithium hexafluorophosphate and battery grade lithium carbonate products from January 1, 2018 to May 15, 2023 (data source: Wind)

　　From historical data, the price of lithium carbonate remains linked to the price of lithium hexafluorophosphate.

　　According to the supplementary due diligence report on the non-public issuance of A-shares by China International Capital Corporation on May 16th, the price fluctuations of lithium hexafluorophosphate products have a certain periodicity. Lithium carbonate is one of the main raw materials used in the production of lithium hexafluorophosphate. Since 2021, the overall price of lithium carbonate has significantly increased. The price of lithium carbonate has continued to rise from about 90000 yuan/ton at the end of May 2021 to about 500000 yuan/ton by mid March 2022, and has maintained a high level of operation, with the highest increase exceeding 400%. Starting from November 2022, the price of lithium carbonate began to rapidly decline, and the price of lithium hexafluorophosphate was also in a downward trend. However, the price of lithium hexafluorophosphate fell earlier than that of lithium carbonate and the rate of decline was faster. There was a temporary mismatch between the prices of lithium hexafluorophosphate and lithium carbonate, resulting in a significant squeeze on the gross profit and gross profit margin levels of lithium hexafluorophosphate.

　　Battery Network noticed that in early January 2023, the price of lithium hexafluorophosphate was about 230000 yuan/ton, and has been showing a fluctuating downward trend since then, dropping below 80000 yuan/ton in mid to late April. After the May Day holiday, the price of lithium hexafluorophosphate was around 80-90000 yuan/ton. Supported by factors such as the rise in lithium carbonate price, the price of lithium hexafluorophosphate has doubled within the month.

　　According to iFinD data from Tonghuashun, the spot price of lithium hexafluorophosphate rose to 140000 yuan/ton on May 18th, with a daily increase of 5.66%, a weekly increase of 21.74%, and a monthly increase of 60%.

　　According to data released by SMM, the price of lithium hexafluorophosphate increased by 6500 yuan/ton on May 18th, with an average price of 146500 yuan/ton, an increase of 4.64% on the same day.

　　The person in charge of polyfluoropoly, a leading enterprise in lithium hexafluorophosphate, said in a recent interview with the Securities Times, "The price of lithium hexafluorophosphate began to rise at the end of April. Currently, the market quotation is between 130000 and 140000 yuan per ton, and some regions even offer 160000 to 170000 yuan per ton. The situation is indeed significantly improved compared to the previous period

　　From the perspective of quotation, the price of lithium hexafluorophosphate has basically doubled within the month.

　　SMM believes that the reason for the price increase of lithium hexafluorophosphate is due to the current tight supply. When the initial inventory reaches low value, the price of the production raw material lithium carbonate increases. Lithium hexafluorophosphate enterprises are cautious in purchasing raw materials out of wait-and-see behavior. Currently, the prices of lithium carbonate and lithium fluoride continue to rise, making it more difficult for lithium hexafluorophosphate enterprises to purchase raw materials and limiting production. Moreover, high raw material prices have driven up the cost of lithium hexafluorophosphate, leading to an increase in the price of lithium hexafluorophosphate.

　　However, from the perspective of production capacity alone, the driving force behind the significant increase in the price of lithium hexafluorophosphate is weak. Research institution EVTank previously mentioned that according to the global construction capacity and progress of lithium hexafluorophosphate, the actual production capacity of the entire industry will reach 379000 tons by the end of 2023, and the nominal total production capacity of the entire industry will reach 713000 tons and 1141000 tons by 2024 and 2025, respectively. Compared to demand expectations, there is already a serious surplus in nominal planned production capacity.

　　Huajin Securities also pointed out in its research report released on May 18th that the expected demand for lithium hexafluorophosphate in 2025 is about 310000 tons/year, far lower than the overall planned production capacity of various enterprises. In the future, the supply side of lithium hexafluorophosphate will be relatively loose. At present, the profitability of lithium hexafluorophosphate has reached its bottom, and the outdated high cost production capacity of second and third tier enterprises is expected to be phased out. The pace of releasing new production capacity may also be adjusted, and the industrial pattern is expected to be concentrated towards leading enterprises.

　　Conclusion: Recently, the price of battery grade lithium carbonate has maintained an increase of over 10000 yuan per ton for multiple trading days, and lithium hexafluorophosphate has also followed the trend. Overall, there are both pessimistic and optimistic emotions in the industry regarding the current rebound in the prices of lithium carbonate and lithium hexafluorophosphate. However, in the short term, the bullish sentiment is relatively strong.